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South Africa

South Africa opens inquiry into improper use of government pension funds

From the website of the Commission of inquiry into allegations of impropriety regarding Public Investment Corporation
From the website of the Commission of inquiry into allegations of impropriety regarding Public Investment Corporation justice.gov.za

A commission of inquiry into South Africa's Public Investment Corporation (PIC) has just opened. The inquiry has a remit to look into allegations of mismanagement and corruption going back to 2015. The PIC is Africa's biggest asset manager.

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The PIC manages the bulk of pensions of South African civil servants on behalf of the Government Employees’ Pension Fund. Its investments are worth two trillion rands, about 126 billion euros. The scale of its investment makes the PIC the largest investor on the Johannesburg stock exchange.

President Cyril Ramaphosa appointed a commision of inquiry last August following a number of reports about alleged impropriety and dubious investments. It is headed by former Supreme Court of Appeal President, Judge Lex Mpati.

The inquiry will focus on the period between January 1st, 2015, and August 31st, 2018. Former CEO, Dan Matjila, resigned last November, but is reportedly contesting the circumstances surrounding his departure.

There were allegations that the CEO colluded with firms in which the PIC invested. Furthermore, the commission will also examine questions about the board's mandate and whether politicians should be on the board.

PIC, a controversial organisation

According to David Lewis, executive director of Corruption Watch in Johannesburg, the PIC has always been a controversial organisation because of its power.

"The inquiry will ascertain whether there has been corruption or mismanagement. But sometimes people think because an investment has not realised the returns or when it fails, that in itself is evidence of corruption or mal-administration. It may be neither. It may just be that investments are risky and sometimes they go wrong," he says.

"The trick is to ensure that on balance you maintain and increase the value of the fund. Not every single investment made are successful but [here] there are some which cry out for investigation."

An interim report is expected by February 15, 2019, the final report is to submitted on April 15, 2019, before the general elections in May.

A number of people have come forward to testify and are being heard by the Commission's investigative team. The Commission's website will list the name of the people who will testify on the eve of their public testimony. The testimonies will then be made available on the website.

Some South Africans appear to be dejected by the process and expressed their doubts as to what the inquiry will uncover.

A high percentage of South Africans are not convinced inquiries will produce results.

Follow David Lewis on Twitter @Corruption_SA

Follow Zeenat Hansrod on Twitter @zxnt

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